Peru’s chain challenges

Fecha publicación: 5 October, 2015
Categorías: Logistics&Customs
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Autor: Arola

Over the past decade, the Peruvian economy has maintained growth rates of GDP close to an average of 6% ​​annually, although since 2014 this rate has moderated. Various sources place Peru leading the growth in Latin America in 2016. However, the environment is uncertain, primarily marked by volatility and sharp decline in the price of raw materials and the slowdown in major trading partners of the country.

In this context, Peru maintains its plan to diversify production and investment in infrastructure, thanks to the accumulated reserves during the economic boom and with the aim of providing the country with the means to keep the pulse of economic growth and social improvement.

The Peruvian economy is an open economy, showing Peru’s strong will to trade internationally with the rest of the World. It has signed trade agreements with major international markets and has unilaterally reduced its import tariffs, with an average of 2.5%. They just have completed the negotiations for the adoption of the Trans-Pacific Partnership Agreement (TPP), which places Peru within the larger global trade treaty by integrating 12 economies with an impact of 40% of world GDP.

The Department for Foreign Trade and Tourism in Peru (Ministerio de Comercio Exterior y Turismo – MINCETUR) offers on its website information on these trade agreements, both the ones in force and the ones in negotiation, which should be subject to a first analysis in commercial transactions with Peru.

The scenario that offers the Peruvian market forces our companies to consider the country as a potential target market of their products and to evaluate the best access and expansion strategy. Peru can also be an excellent provider of traditional products (such as agricultural and fisheries products) or new “non-traditional” products emerging as a result of its diversification (textiles or chemicals, for example).

In any case, in the exchange of goods with Peru, it must be taken into account the particularities of the actors in the supply chain, in order to be able to project the distribution efficiently. Ports, airports, customs and customs agents, freight forwarders, warehouses and transportation companies will be critical to the competitive positioning of the commercialized products with the country.

Logistics performance measurement by the World Bank, through the Logistics Performance Index, places Peru as number 71 in the ranking of countries, identifying the logistic challenges that Peru should face in the coming years.

 

Retos de la cadena logística en Perú - Woldbank

Source: http://lpi.worldbank.org/

 

Customs in Peru, SUNAT (Superintendecia Nacional de Aduanas y de Administración Tributaria, organization which enforces customs and taxation in Peru), plays an important role in facilitating imports and exports. Control at the time of customs clearance is rigorous and Customs assumes here, as it does elsewhere, the safety-related functions in addition to the tax collection that has historically been doing.

However, the requirements for operators of foreign trade passing through customs are clearly defined. In this sense, the web of SUNAT issues specified taxes payable to the import requirements, necessary documents, export procedure, restricted and prohibited goods, tariff classification and all those matters to be taken into account for customs procedures.

In addition, the Peruvian customs offers companies two types of figures that also speed customs clearance. To import, about 500 companies considered “frequent Importers” selected by Customs based on their own high-volume of operators reduce their controls on the value of goods and physical at the time of release. On export, at the request of companies and prior audit by Customs, they may be certified as Authorized Economic Operators (AEO), offering advantages on priority inspections and regularizing exports preference.

Regarding infrastructures, we will consider that when we make a trade with Peru, probably our merchandise should probably be downloaded in Callao, either at the port or the airport.

Transit by the Port of Callao constitutes in Peru approximately 75% of domestic cargo and 90% of containers. It is therefore undoubtedly the first Peruvian port, but also the most important in the Pacific Coast of South America. Due to its strategic location and growth prospects of the country, it is expected to extend terminals operating in the Port of Callao, materially increasing its capacity. In turn, the Jorge Chavez International Airport, also located in Callao, concentrates the main airport’s traffic.

Port and airport, surrounded by warehouses, freight forwarders, transport companies and customs agencies, make in Callao an international logistics center to meet Peru’s trade with the rest of the world in a solvent basis. The expansion of the terminals and the identified and planned investment in transport infrastructures, should improve the efficiency of logistics processes in the country.

Nonetheless, logistics costs represent a substantial percentage of sales and purchases of Peruvian products, above the average for the region. These costs particularly tax agricultural products from Peru that can reach even 50% of product value.

In air transport, outsourcing of service delivery of goods in terminal, increases considerably the costs that are usually much more expensive. In maritime transport, use and storage of intermediate agents between the terminal and the final customer, as well as the congestion at the entrance to the port, may also penalize international distribution costs.

In conclusion, we identified as challenges in improving the logistics chain in the country to bet for transport infrastructures as well as the observance of the key role that development of technology can play, in both private and public enterprise, to facilitate and understand the interaction between actors and facilitate customs and transport procedures.

As we usually recommend, passing through ports, airports, and Peruvian customs should be planned in advance to ensure a simple and predictable environment for all those companies who import or export in Peru. The accompaniment and assistance by professionals who know the processes and specific regulations will grant the efficiency of the logistics chain in Peru.

 

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